7 Year Tax plan?
The budget announced a 7 year tax plan, peaking in 2024 with the abolishment of the 37.5% tax bracket, costing $140 billion over 10 years.
This year, low and Middle income earners win with up to a $530 a year tax break. Earning between $48,000 and $90000 will give you $10.19 more a week. Those earning lower than 48000 will see $4 more a week.
But you wont see it in your pay, you will get it at tax time with the new tax offset.
If you earn more than $90000, your tax offset will be reduced at a rate of 1.5 cents for every dollar over $90000.
Another tax change will see those earning more than $90000 will get $2.60 more a week with an increase in the income threshold for the 37c tax rate going from $87000 to $90000. ie. tax savings of $540 a year
From 2022-23 thresholds are going to rise again with the $370000 threshold rising to $41000. And the $90000 threshold rises to $120000, ie a saving of $2025 a year.
The biggest announcement is the abolishment of the 37c tax bracket in 2024.
Medicare Levy is not being increased as announced last year.
The Aged care sector have benefited from the budget with 14000 new home care packages and more funding to the tune of $83m for aged mental health care.
Changes to how much pensioners can earn without effecting their pension is a bonus for working pensioners with a $250-$300/fn increase, and those wanting to re-enter the workforce will benefit from a $10000 wage subsidy. Also, the pension loans scheme has been expanded.
Improved access to aged-care services in regional areas will benefit from a $146m increase.
A new national online register for enduring powers of attorney is supposed to keep older Australians safe, preventing elder abuse…
All in all, its not a very interesting budget, but it is one for continued economic growth and surplus in next years budget.
Book now for a free 15 minute Tax consult with SL Accounting Services.